Department for Levelling Up, Housing and Communities

Local Government Update

Lee Rowley: I would like to update the House on action the Government is taking in relation to two local authorities. In the case of Woking Council, Government is taking decisive action given clear evidence that the best interest of taxpayers is not being served. In the case of Tees Valley Combined Authority, in response to a request from the Mayor, the Secretary of State has decided on an exceptional basis to commission an external assurance review.Woking Borough CouncilWoking Borough Council is a small district that has engaged in commercial investment activities since 2016. As a result of this, as of December 2022 the Council had debts of £1.9 billion, with plans to increase it to almost £2.4 billion by 2024/25, and now faces significant impairments against key assets. This makes Woking the most indebted council in England compared to its financial size, with a net budget of £24 million and core spending power of £14 million. In its most recent budget report Woking Borough Council recognises that this debt, and the Council’s reliance on commercial income to fund services, places it in an extremely challenging financial position. The Department considers that this is, based on current evidence, the most challenging financial position of any local authority in England.The Government is introducing new powers through the Levelling Up and Regeneration Bill that will allow direct intervention where authorities are exposed to excessive risk from borrowing and investment practices. Ahead of that, since May last year, we have been engaging with Woking, given that it is likely to fall within scope of those powers. As a result of our engagement, the Department has been increasingly concerned about the level of risk the Council is carrying and how that is being managed.External Assurance ReviewAs a result of the Department’s concern about the specific situation in Woking, in January 2023 the Department commissioned an External Assurance Review covering the Council’s governance, finance and commercial issues. This review was carried out by Jim Taylor, Carol Culley OBE and Mervyn Greer, with fieldwork taking place over January and February. The review team was asked to provide an external assessment of Woking’s governance arrangements, financial situation, commercial investments and their capacity and capability to manage these in the immediate and longer-term.The Council made the Department aware of further developments in their commercial and finance arrangements in April 2023, following which the Department requested that the review team undertake further fieldwork in April and May. The resulting report reflects all review work undertaken from January to May 2023 and will be published on gov.uk and copies have been deposited in the libraries of both Houses. This report has been redacted in places in light of the commercially sensitive nature of some of its contents. The full report, including the commercially sensitive information, has been considered by the Secretary of State in taking his decisions in relation to Woking.Failure to Comply with Best Value DutyEvidence within the review shows that Woking Borough Council is failing to comply with its best value duty to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness, as required by the Local Government Act 1999. The financial challenge is acute, and the review has concluded that the Council cannot become financially self-sustaining without considerable Government support.To quote the review:“The scale of this issue is unprecedented.”“From the historic base, the sheer scale and complexity of the investment and commercial activity of the council, means that the Council will never have the capacity to effectively manage all the commercial and economic considerations...“Commercially, the council is overstretched and remains reliant on further support in the form of additional skills and capacity to continue to find a resolvable solution to its commercial position.”“There is no realistic route to the Council returning to financial sustainability alone... The Council will need to undertake significant service transformation and consider their future operating model.”"The new leadership of the Council is taking the right steps. However, it does not have the capacity or capability to address a challenge of this scale without additional support...on the current trajectory the Council will not rectify these issues itself and will continue to fail its best value duty. The Council will require significant support, including statutory oversight.”“There are critical decisions that need to be taken in the next 2-3 months, for which immediate expert support is required.” "...the financial issues are more severe and immediate than initially thought [when undertaking work in January and February]”“…This leads to the conclusion that, despite many initiatives and advice being actioned there is no overarching strategy for the whole situation under the council’s control.”In addition to the work of the reviewers, the Department has had direct engagement with Woking Borough Council in relation to its financial situation. It is the Department’s view that the Council has failed to provide assurance that it is taking the necessary actions to comply with its best value duty and address the serious issues noted in the review. Nor have they given the Department assurance that they have capacity to take the necessary action, or develop an adequate strategy to resolve the situation – when considering the scale and pace of the response required.The Council is aware of the gravity of the situation and has made clear in published papers for its meeting on 23 February 2023 that it is at risk of issuing a Section 114 notice, with public statements attributing this to issues relating to shortfalls in commercial income and cost pressures.Statutory Intervention in WokingThe Secretary of State is satisfied that Woking Borough Council is failing to comply with its best value duty. The Secretary of State considers it necessary to put in place an intervention package immediately to secure the Council’s future and sustainable compliance with its best value duty. The intervention will consist of the appointment of Commissioners to oversee specific functions of the Council, alongside directions to the Council. The Secretary of State is confident that this package will address the failings identified, and is necessary for the Council to secure compliance with its best value duty.It is the Secretary of State’s view that the situation in Woking is sufficiently urgent to justify forgoing the usual period of representation. He considers that there is a pressing case for urgent government action to protect the interests of the residents and tax-payers of Woking, and the public purse. The scale of Woking’s financial challenges is unprecedented, and we have serious concerns about their commercial arrangements; the Secretary of State is concerned that further evidence of failure could come to light imminently and require further immediate action. The appointment of Commissioners and the Directions set out below will therefore take effect from today.Appointment of CommissionersThe Secretary of State is appointing the following individuals as Commissioners to exercise certain functions as required:Jim Taylor (Lead Commissioner) - Jim is an ex-Chief Executive Officer of three metropolitan borough local authorities and was appointed in March 2022 by the Secretary of State as a commissioner at Sandwell Metropolitan Borough Council. He also conducted a governance review of Slough Borough Council for the Secretary of State in 2021.Carol Culley OBE - Carol is the current Deputy Chief Executive and section 151 officer at Manchester City Council. She is CIPFA Junior Vice President, a member of the CIPFA Council and Chair of the CIPFA Public Financial Board; andMervyn Greer - Mervyn is a Crown Representative at the Cabinet Office where, amongst other responsibilities for strategic suppliers to HMG, is the appointed Crown Representative for Local Government Commercial and the LGA. His background is in property and built asset management in the private sector, where he was responsible for major outsourcing and property related commercial contracts. He retired from the private sector in 2016. He was a member of the team which conducted the statutory Best Value Inspection of Liverpool City Council in 2021.The Secretary of State has taken the unusual step of appointing the three individuals who carried out the External Assurance Review as Commissioners. This reflects the acute situation in Woking, and the urgent need for Commissioners to begin work immediately to ensure that the Council takes steps to secure compliance with their best value duty. The Secretary of State considers that these individuals are best placed to take up these roles in the immediate term, due not only to the knowledge acquired during their time reviewing the Council, but also their individual knowledge and experience in local authority leadership, governance, and commercial development. Our understanding of the situation in Woking is likely to change throughout the period of intervention. Their appointments are therefore for 12 months and will be reviewed within six months or at such a time as the Secretary of State determines necessary.The scale of the financial challenge in Woking means that the Council must take immediate steps to address their commercial and financial challenges, and to make transformative change across its entire operations. The Commissioners will therefore exercise the following functions:those associated with the source of Woking’s failures – financial governance and decision making, commercial decision making and management of commercial projects, regeneration and property;those where the Council will need to make changes as a result of these failures – functions associated with the Council’s operating model and service redesign to achieve value for money and financial sustainability; andthose that will ensure the Council has the right skills and structures to make ongoing improvements across the entire organisation – governance and scrutiny of strategic decisions; and the appointment, dismissal and performance management for senior and statutory officer positions.Directions to Woking Borough CouncilAlongside this, Woking Borough Council will be directed to prepare and agree an Improvement and Recovery plan to the satisfaction of Commissioners. This must include, as a minimum, plans to:achieve financial sustainability and reduce debt;ensure value for money when exiting commercial arrangements;ensure compliance with financial management rules and guidance;reconfigure services; andensure the Council has the necessary skills, capabilities and capacity to carry out this work and achieve compliance with their best value duty.As with other interventions led by the Department, the Council are directed to meet the costs of the Commissioners. The fees paid to individuals are published in appointment letters which are available separately on gov.uk. I am assured this provides value for money given the expertise that is being brought, and the scale of the challenge in councils requiring statutory intervention.The Government is committed to making sure the residents of Woking have what they need from their local council, including confidence in its service delivery, financial management and governance.I will publish the Directions and Explanatory Memorandum associated with this announcement on gov.uk, and place copies in the libraries of both Houses.Independent Review: TeesworksYesterday, the Secretary of State confirmed that he has made the exceptional decision to support the commissioning of an independent review to consider the specific allegations made, and Tees Valley Combined Authority’s oversight of the South Tees Development Corporation (STDC) and Teesworks joint venture.The Tees Valley Mayor approached Government some time ago regarding the possibility of an independent review of STDC and Teesworks. He raised concerns regarding the allegations made in Parliament by Andy McDonald MP of ‘dubious dealings’ and ‘industrial-scale corruption’. The Mayor was, understandably, particularly concerned about the damaging effects that these allegations could have on investment and job creation across Teesside.My colleague, the Minister for Levelling Up, explained in her letter of 17 May to Andy McDonald MP that the Department has so far seen no evidence of corruption, wrongdoing, or illegality. This is still the case.The Secretary of State’s decision has been taken in response to Mayor Houchen’s previous request for an independent review to address these allegations and reflects his recognition that the continued allegations of ‘corruption’ poses a real risk to the shared ambitions to deliver jobs and economic growth in Teesside.In line with established practice, a Review Panel will be appointed by the Secretary of State to undertake the independent, external assurance review. The members of the Panel will be announced shortly as will detailed terms of reference. Since serious allegations of corruption, wrongdoing and illegality have been made, I will ask the Panel to address these accusations directly, and to report on the governance arrangements at STDC including how decisions are made, as well as looking at the value achieved for the investment of public money on the site.The Secretary of State yesterday wrote to the Tees Valley Mayor explaining his decision, a copy of his letter has been placed in the Library of the House of Commons. He also wrote to the Chairs of the Levelling Up, Housing and Communities and Business and Trade Select Committees, and to the Shadow Secretary of State for Levelling Up, Housing and Communities.Any interested party, including Members of Parliament, will be invited to make representations to the Panel as part of their evidence gathering. The report and any recommendations will of course be published in line with usual practice.

Foreign, Commonwealth and Development Office

Hong Kong Six-monthly Report

James Cleverly: The latest Six-monthly Report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today. It covers the period from 1 July – 31 December 2022. The report has been placed in the Libraries of both Houses. A copy is also available on the Foreign, Commonwealth & Development Office website.I commend the report to the House.

Department of Health and Social Care

Delivering for Patients

Steve Barclay: I refer hon. Members to the Oral Statements I will make in the House today, 25 May 2023, on Patient Choice and New Hospitals.

Cabinet Office

Update on Contingent Liabilities in respect of the compulsory liquidations of UKCloud Ltd and Virtual Infrastructure Group Ltd

Jeremy Quin: I am pleased to report that, following the compulsory liquidations of UKCloud Ltd and Virtual Infrastructure Group Ltd, His Majesty’s Government have successfully enabled the continuity of public services. On 26 October 2022, I laid a departmental minute to notify the House of two contingent liabilities incurred by the Cabinet Office: to indemnify the Official Receiver for any costs and expenses incurred by him in carrying out the proper performance of his duties as liquidator of UKCloud Ltd, and its parent company, Virtual Infrastructure Group Ltd; and an indemnity for any claims made against him in respect of the same. This was followed by written statements from myself and Baroness Neville-Rolfe in each of our respective Houses.At the time of the statements, it was not possible to reliably estimate the size or maturity of either contingent liability.In respect of costs incurred, the Official Receiver now expects the peak funding requirement of the liquidations to be £20 million and the liquidation to conclude in the first half of 2024.In respect of the claims indemnity provided to the Official Receiver, I would like to assure the House that the Official Receiver has not been notified of any potential claims that may require a call on the indemnity, and that all UKCloud Ltd customers have now successfully migrated their services on to alternative platforms with no unexpected disruptions to public services. As such, it is deemed unlikely any claims on the indemnity will be made post-liquidation. We, therefore, assess that it is unlikely that there will be any cost to the public purse as a result of this contingent liability.

Ministry of Justice

Government Response to Legal Aid Means Test Review

Mike Freer: My noble friend the Parliamentary Under Secretary of State for Justice (Lord Bellamy KC) has made the following Written Statement:‘Legal aid is fundamental to a fair justice system and underpins the rule of law. It ensures equality of arms, so that people can access justice and enforce their legal rights. Means testing is a crucial component of the justice system as it ensures those on lower incomes receive help with paying their legal costs, and that those who can afford to contribute towards their legal costs do so.The Government has today published its response to the consultation which reviewed the entire system of legal aid means testing. The comprehensive suite of changes we will now be implementing to civil and criminal legal aid means tests will significantly widen eligibility for legal aid and ensure continued access to justice.Changes we will be making include:- Increasing income and capital thresholds for legal aid eligibility, so they better reflect essential living costs and different household compositions. This means that 3.5 million more people will be eligible for criminal legal aid in the magistrates’ court and 2.5 million more people will be eligible for civil legal aid;- Introducing a £500 per month earnings threshold for applicants in receipt of Universal Credit. If exceeded, applicants will need to complete a full income assessment in the same manner as applicants not in receipt of benefits. This replaces the interim position adopted in 2013, when Universal Credit roll out began. This policy is designed to deliver fair eligibility according to applicants’ means, regardless of the source of those means;- Removing the upper income threshold for legal aid at the Crown Court, meaning that all Crown Court defendants will be eligible for legal aid. Those on higher incomes will be asked to pay more towards to their legal aid, ensuring taxpayer resources are directed at those most in need;- Excluding assets such as the family home from the means test where they are the subject matter of the case or where coercive control has denied applicants use of their shared marital assets, making it easier for domestic abuse victims to access legal aid;- Removing the means test for three areas of civil legal aid: civil representation for under-18s, civil representation for parents or those with parental responsibility facing the withdrawal of life-sustaining treatment from their child, and legal help for inquests involving a potential breach of rights under the ECHR (within the meaning of the Human Rights Act 1998) or where there is likely to be a significant wider public interest in the individual being represented at the inquest.The MTR will be implemented in phases. Phase 1 will deliver changes to non-means tested areas. The rest of the new civil means test will be implemented in phase 2, followed by the new criminal means tests in phases 3 and 4. Changes to the regulations will be laid in 2023/24, coming into force in 2025. This timeframe allows digital build and testing of the new assessments by the legal aid agency and legal aid providers.This has been an open and collaborative review and we are grateful for the invaluable contribution of a wide range of interested parties throughout the consultation period and during the course of the review.’

Department for Education

Level 3 Qualifications Review Update

Robert Halfon: Today I am announcing an update to phase 2 of the Government’s reforms to post-16 qualifications at level 3 in England – removing funding from technical qualifications that overlap with T Levels. We are publishing a provisional list: https://www.gov.uk/government/publications/wave-3-t-levels-overlapping-qualifications, of 92 technical qualifications that have been assessed to overlap with wave 3 T Levels: Business and Administration; Engineering and Manufacturing; and Finance and Accounting.The assessment of overlapping qualifications is carried out by independent assessors, who carry out in-depth reviews of qualifications. This is the same process as for waves 1 and 2 T Levels. Subject to the outcomes of an appeal process which gives awarding organisations the opportunity to contest a qualification’s placement on the list, we will withdraw public funding at 16-19 from these qualifications for new starts from August 2025. On the provisional list of 92 qualifications, we know there were 36 qualifications which had no enrolments and a further 24 had fewer than 100 enrolments in 2020/21 academic year, highlighting the need to streamline the qualifications system. The final overlap list for wave 3 T Levels will be published in the autumn.We are reforming technical qualifications at level 3 as the current qualifications do not consistently progress young people to related employment. In the future technical qualifications will be based on IfATE’s occupational standards which have been designed by employers and which set out the knowledge, skills, and behaviours that employers need.Removing funding from technical qualifications which overlap with T Levels will ensure young people can feel confident that they are studying technical qualifications which will prepare them for jobs in their chosen occupation. The breadth and depth of T Levels is unmatched, giving students a thorough understanding of the sector and the skills needed to work in specific occupations, as well as an industry placement which gives them valuable experience.T Levels are being scaled up in a managed rollout, with 16 subjects currently available at over 160 providers across England, with 24 T Levels in total planned by 2025. We are continuing to build on the success of T Levels and have put in place extra measures to support providers, employers and students. We are providing a 10% uplift in funding to providers delivering T Levels for the 2023-24 academic year, a new £12m Employer Support Fund and extra funding for providers to provide careers guidance on T Levels. The Gatsby Charitable Foundation is also supporting providers as they make the move to T Levels. This includes a new Technical Education Networks Programme to offer subject-specific support for T Level teaching, and providing grant funding to the Baker Dearing Educational Trust to support UTCs in their transition to T Levels.We are supporting more learners to access T Levels through the T Level transition programme. This is a high quality, holistic study programme for learners who would benefit from the additional study time and preparation that it will give them before they start their T Level. Learners on the programme develop a broad range of knowledge, skills and behaviours to prepare them for T Levels. This includes the national technical content developed for the programme, through which learners gain industry-relevant technical knowledge and practical skills aligned to T Levels, as well as gaining valuable work experience and preparation for the workplace, English, maths and digital skills, developing their study skills and wider personal development. In total, close to 9,800 students have enrolled on the programme in the first three years, since 2020, and provisional estimates show that c.49% of the first cohort subsequently progressed onto level 3 or higher outcomes.The removal of public funding from qualifications that overlap with T Levels at 16-19 forms a small part of our wider technical education reforms. Our new integrated funding approval process means that from 2025, awarding organisations can develop and submit new technical qualifications for funding, which are based on occupational standards approved by the Institute for Apprenticeships and Technical Education.Awarding organisations with qualifications on the wave 3 overlap list have been notified, as have the Federation of Awarding Bodies and Joint Council for Qualifications.

Department for Work and Pensions

Health Transformation Programme update

Tom Pursglove: I would like to update the House on the outcome of the procurement of new health and disability benefit assessment contracts – the ‘Functional Assessment Services’ contracts – for the period 2024 to 2029. These important new contracts have been subject to a rigorous and competitive process in line with public contract regulations.In the Health and Disability White Paper published in March, I set out the actions this Government will take to ensure disabled people, and people with health conditions, can lead independent lives and fulfil their potential. Firstly, by reforming the benefits system for the future so it focuses on what people can do, rather than on what they cannot. Secondly, by investing in our employment offer to help more disabled people and people with health conditions to start, stay and succeed in work. And thirdly, by ensuring people can access the right support at the right time and have a better overall experience when applying for, and receiving, health and disability benefits.To support these important commitments, the Health Transformation Programme is modernising benefit services to vastly improve the claimant experience, build trust in our services and the decisions we make, and create a more efficient service for taxpayers. As part of this, the programme will deliver improvements I announced through the White Paper.The Health Transformation Programme is developing a new Health Assessment Service and transforming the entire Personal Independence Payment (PIP) service, over the longer term. The Health Assessment Service is being developed on a small scale initially and will gradually replace the different services we and our assessment providers use to undertake health assessments across all benefits. It will be fully integrated with other systems, including the transformed PIP service, with the aim of creating a much-improved experience for people who apply for support.The Functional Assessment Services contracts will provide the foundation for the new Health Assessment Service, replacing the separate contracts for Health and Disability Assessment Services and PIP assessments with single contracts for all assessments in a geographic area. The contracts will ensure continuity of service for claimants while we safely develop the new Health Assessment Service and provide the flexibility to introduce it gradually before we roll it out nationally from 2029.We have informed bidders that the successful bidders in each geographic lot are as follows:Lot 1 (North England and Scotland): Maximus UK Services LimitedLot 2 (Midlands and Wales): Capita Business Services LimitedLot 4 (South East England, London and East Anglia): Ingeus UK LimitedLot 5 (Northern Ireland): Capita Business Services LimitedProcurement activity in Lot 3 (South West England) is continuing and we will announce the outcome in due course.We will work with providers to ensure that the transition to the new service is as smooth as possible. We will also work with the Functional Assessment Services providers to deliver structural reform, removing the Work Capability Assessment via a phased approach over the lifetime of the contracts, as announced in the White Paper.This represents a positive step forward in delivering our ambitions for disabled people and people with health conditions. It shows that this Government is committed to delivering a more effective health and disability system for people now and in the future.

Department for Environment, Food and Rural Affairs

Government Response to the Rock Review on Agricultural Tenancies

Mark Spencer: I am repeating the statement made yesterday by my noble friend the Minister, Lord Benyon.Following the UK Farm to Fork Summit last week, the government has today set out its next steps to support tenant farmers who are at the heart of our rural economy. The Government supports tenant farmers because there is no better way to bring new people into the sector.We are today publishing the government response to the Rock Review of tenant farming in England. From day one of the agricultural transition, we have worked with tenant farmers as we co-designed our farming schemes, utilising their knowledge and experience. This is the next step, alongside significant work to date, to support farmers in all corners of the country to produce world class food, while protecting the environment. The government supports tenant farmers, because is one of the best routes to bring new people into the sector. I would like to thank Baroness Rock and the Tenancy Working Group for their time and dedication in producing the Review. Recognising how critical the tenanted sector is to a successful agricultural transition, we commissioned the Group, chaired by Baroness Rock, to carry out a comprehensive review of tenant farming in England. Today’s response builds on the considerable progress that we have made since the Review was commissioned to implement their ongoing feedback. For example, we have designed the Sustainable Farming Incentive (SFI) to be as accessible as possible to tenants, with the addition of six new standards in 2023 and shorter agreements. Further, half of the 22 Landscape Recovery projects selected in the first round involve tenants and we are delivering the aims of the Local Nature Recovery (LNR) scheme by evolving Countryside Stewardship (CS) instead of building an entirely new scheme. As announced at Budget 2023, we launched a consultation on extending inheritance tax relief. We have opened a Call for Evidence on the taxation of ecosystem service markets to understand the commercial operations and the areas of uncertainty in respect of taxation. We have also published the Nature Markets Framework, which provides greater clarity on the principles that will guide the development of UK market mechanisms for carbon and other ecosystem services and set out next steps including arrangements to develop a suite of investment standards for nature markets. These consultations, combined with the Nature Markets Framework, should give tenants and landlords more confidence to invest in and securely access payments from these new markets, opening up new revenue streams for the sector. We strongly agree with the review that tenant farmers should be able to access farm offers; make their essential contribution to restoring the natural environment; and produce food for the nation. We are therefore taking forward the majority of Baroness Rock’s recommendations and setting out the next steps to implement them today. Today we are announcing a new Farm Tenancy Forum to put in place more formal engagement and feedback structures between Defra and the tenanted sector. This will allow the tenanted sector to work with us, to provide regular feedback on trends in tenant/landlord agreements and report any emerging issues that may need addressing. effectively monitor trends in landlord-tenant relationships. We are inviting industry organisations who represent tenant farmers, agricultural landlords and professional advisors who work in the sector to be members of this group. The Forum will support the implementation of the Government Response to the Rock Review, feeding back real-world experience and insight on progress. A Terms of Reference for the group has been published alongside this government response. We will be launching a call for evidence this summer to explore the proposal for a tenant farming commissioner in England in more detail. This will examine the benefits and impacts of how a Tenant Farming Commissioner might work in practice and how the role would fit within existing procedures and regulations. We agree with the Review that the tenanted sector has an essential role as a route into farming for new entrants. We will work to embed the views of the tenanted sector in the development of our New Entrant Support Scheme, working closely with the new Tenant Farming Forum.Our response sets out the significant progress we have made to ensure our new farming schemes work for every type of farmer. We are supporting those with shorter tenancies or where there is a change of land manager/owner by removing penalties and increasing flexibility in agreement lengths, where it still provides value for taxpayer money. We are also introducing a requirement in Countryside Stewardship for landlords to engage with their tenant prior to applying in order to obtain their support. The legacy of the Review will mean that tenant concerns are heard and addressed through our policies and schemes, and we will continue to engage with the Forum and the wider sector as we implement its recommendations and move through the agricultural transition.